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Sneak Peek: An official Chinese crypto wallet

Photo of: Joseph Stone
by Joseph Stone

Experts were able to see a digital yuan portfolio that was used briefly and put online at the end of last month. They said they discovered important technical details and possible usage scenarios.

The China Construction Bank (CCB), one of the world’s largest commercial banks by market capitalization, has been working with the People’s Bank of China (PBoC) on the PBoC’s digital currency pilot projects.

The CCB, along with three other government-run commercial banks, has developed its own digital portfolio service for the PBoC token.

This crypto wallet should be used to enable the PBoC to distribute its token to users. They will also allow sellers to process payments in digital yuan as end-users currently do with electronic payment platforms such as Alipay.

At the end of August, many Internet users in China were able to access a CCB crypto wallet that was apparently only intended for use in a controlled environment and not yet announced to the public. Some even tested the wallet’s functionality and transferred funds into their wallets until the CCB eventually took it offline, asking customers to be “patient”.

The CCB was even forced to close the portfolios containing funds, reimbursing customers who had given a try to these new crypto wallets through traditional bank transfers.

The apparent blunder by the CCB, however, allowed Chinese experts to take a closer look at the portfolio. According to the People’s Daily, the CCB has since insisted that the wallet was only a prototype and not proof that the launch of the digital yuan would be imminent.

In any case, reporters noted that the wallet clearly had “payment, collection, scanning and transfer” functions. They added that it also used scannable QR codes and near field communication (NFC) technology based on a smartphone.

The media quoted a technology expert from a government-funded R&D center who said it was proven that the portfolio would also be usable offline and that it would need neither phone network coverage nor WiFi/data connections to operate.

“As long as the phone has a sufficient battery, the portfolio will be functional,” the expert said.

People’s Daily also said there were actually four levels of digital yuan wallets available in the CCB’s offering. Each level has a different cap on payments, as well as a maximum balance limit.

The portfolio with the highest limit would offer users a maximum balance of about $1,463, with a payment cap of about $531 which sounds relatively low. These wallets will be destined to everyday use however and not trading as such, so these numbers should be enough for this kind of usage.